Tag: sundaram clayton

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Market News Top 10 News

L&T, ReNew Tie Up For Green Hydrogen Projects – Top Indian Market News

L&T partners with ReNew for green hydrogen projects in India

Larsen & Toubro (L&T) and ReNew Power have signed an agreement to tap the $2 billion green hydrogen business opportunities in India and neighboring countries. Under this agreement, L&T and ReNew will jointly develop, own, execute and operate green hydrogen projects. The partnership will allow both companies to pool their knowledge, expertise, and resources to take maximum advantage of the transition to cleaner fuel amidst climate change concerns. 

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Maruti Suzuki to hike prices in January

Maruti Suzuki India Ltd (MSIL) has announced plans to hike vehicle prices in January 2022 due to the increase in various input costs. The company said that the price hike will vary for different models. MSIL had increased the prices of its models in March, July, and September this year.

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Sundaram Clayton accelerates transformation journey with Altizon’s Datonis Digital Factory

Altizon Inc. is working with Sundaram Clayton Ltd (SCL) to scale up the deployment of its industry-leading Datonis Digital Factory in casting and machining cells across all SCL plants in India and North America. US-based Altizon’s Datonis Digital Factory is a cloud-based smart manufacturing platform that enables SCL to connect data from their physical assets, spread across multiple locations and enterprise systems onto a single platform. 

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ABB India completes sale of Dodge Business for Rs 45 crore

ABB India Ltd has completed the sale of its mechanical power transmission division (Dodge Business) to Dodge Industrial India Pvt Ltd (DIIPL). The consideration received for the sale is Rs 44.58 crore. DIIPL is an affiliate of RBC Bearings Incorporated, an international manufacturer and marketer of highly engineered precision bearings and products.

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Cadila’s Covid vaccine to be introduced in 7 states first

The Indian government will initially introduce Cadila Healthcare Ltd’s Covid-19 vaccine ZyCoV-D in seven states, including Maharashtra and West Bengal. The pharma company will supply one crore doses of ZyCoV-D to the Centre by December. ZyCoV-D has been developed indigenously by Cadila Healthcare. It is also the first Covid-19 vaccine that is needle-free and administered using PharmaJet, a needle-free applicator to ensure painless intradermal vaccine delivery.

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Shriram City Union Finance disburses highest ever loans worth Rs 1,022 crore in November

Shriram City Union Finance disbursed the highest ever loans worth Rs 1,022 crore for 1.6 lakh two-wheelers in November. This is the second consecutive November that the non-banking financing company (NBFC) has crossed the Rs 1,000 crore disbursement mark. The company primarily caters to salaried and non-salaried buyers inclined towards entry-segment two-wheelers, having the highest demand across categories.

Skipper secures orders worth Rs 300 crore

Skipper Limited has secured an order worth Rs 115 crore for transmission towers from Power Grid Corporation of India (PGCIL). The company’s engineering business has received export orders for transmission towers worth Rs 185 crore for several T&D projects across Latin America, the Middle East, West Asia, and South Asia markets. It has also secured export orders for telecom towers from Latin America and Africa. Skipper Ltd is an Indian transmission and distribution structures manufacturing company.

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Bharat Dynamics secures order worth Rs 471 crore from Indian Army

Bharat Dynamics Ltd (BDL) has signed a contract with the Indian Army worth Rs 471.41 crore for the refurbishment of IGLA – 1M missiles. The refurbishment will increase the life of the missiles by 10 years. BDL will also deal with the manufacturing and supply of guided missiles, underwater weapon systems, airborne weapon systems, ground support equipment, and product life cycle support.  

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Mahindra Finance reports 17% YoY rise in disbursements in Nov

Mahindra & Mahindra Financial Services Ltd reported a 17% year-on-year (YoY) increase in loan disbursements to Rs 2,500 crore. The collection efficiency improved further to 94% in November 2021, compared to 84% in Nov 2020 and 91% in October 2021. The company expects this positive trend to continue in December. 

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India to launch $10 billion incentive package to attract chip makers: Report

According to a report from Bloomberg, India is finalizing an incentive package of $10.2 billion (~Rs 76,400 crore) to attract companies to start manufacturing semiconductors in the country. The government will offer incentives over six years for domestic production of semiconductor fabs, display fabs, design, and packaging to cut down dependence on imports. The report further states that the Union Cabinet is expected to take up the proposal for approval soon.

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Market News Top 10 News

Zomato to Raise Rs 8,250 crore via IPO – Top Indian Market News

Zomato to raise Rs 8,250 crore via IPO

Foodtech platform Zomato has filed a Draft Red Herring Prospectus (DRHP) with market regulator SEBI, proposing an initial public offering (IPO) of Rs 8,250 crore. The IPO will consist of a fresh issue of equity shares worth Rs 7,500 crore and an offer for sale (OFS) of Rs 750 crore by promoter Info Edge. Zomato plans to use the proceed from the IPO towards funding growth initiatives and for general corporate purposes.

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SBI board approves raising $2 billion through bonds

The Board of Directors of State Bank of India (SBI) has approved raising up to $2 billion (~Rs 14,895 crore) through bonds. The funds are to be raised through a public offer and/or private placement of senior unsecured notes in US Dollars or any other convertible currency during FY 2021-22. In January, SBI had concluded the raising of $600 (~Rs 4,500 crore) from bonds to fund the expansion of its overseas business.

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Bajaj Finserv Q4 Results: Net profit jumps five-fold to Rs 979 crore

Bajaj Finserv Limited reported a five-fold YoY jump in net profit to Rs 979 crore for the quarter ended March (Q4). Revenue from operations rose 16% YoY to Rs 15,387 crore during the same period. Its life insurance business registered a 515.8% YoY growth in profit to Rs 234 crore, and Bajaj Finance Ltd’s net profit increased by 42% YoY to Rs 1,347 crore in Q4. For the financial year ended March 31, 2021 (FY21), net profit has grown by 32.7% YoY to Rs 4,470.46 crore. The company’s board has declared a final dividend of Rs 3 per share.

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LT Foods partners with Humankind Group to develop commercial-scale biomass plants

LT Foods Limited has entered into a partnership with US-based Humankind Group (HKG) to explore an opportunity to develop commercial-scale biomass plants. The plants would help recycle rice paddy straw into green energy and bio-fertilizer in India under its Environment Sustainability Program. LT Foods and HKG plan to advance the partnership and facilitate the local ownership of the first commercial-scale biomass facility. 

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Hathway Cable Q4 Results: Net profit rises 47% YoY to Rs 72 crore

Hathway Cable & Datacom Ltd reported a 47.68% YoY increase in consolidated net profit to Rs 72.04 crore for the quarter ended March (Q4). Its revenue from operations declined 3.72% YoY to Rs 438.71 crore during the same period. For the financial year ended March 31, 2021 (FY21), net profit has jumped 143.64% YoY to Rs 252.73 crore. 

On April 27, the sovereign wealth fund of the Government of Singapore bought 1.6 crore shares of Hathway Cable & Datacom for Rs 22.22 per share through a bulk deal on the NSE.

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Morepen Labs’ board approves $100 million investment by Corinth Group

The Board of Directors of Morepen Laboratories Ltd has approved an investment of $32.50 million from Switzerland-based Corinth Group, as part of the private investment firm’s proposed $100 million (~Rs 745 crore) investment in the Morepen Group. The balance $67.50 million will be invested in promoter group companies. Corinth would be allotted 5.85 crore new equity shares on a preferential basis. The investment is subject to the approval of shareholders and other regulatory bodies.

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Anupam Rasayan secures order worth Rs 1,100 crore for supply of specialty chemicals

Anupam Rasayan India Ltd has received a Letter of Intent from one of the top 10 multinational life sciences companies for supplying specialty chemicals. The total value of the order is Rs 1,100 crore. The company will provide multiple products from the ‘life sciences related specialty chemicals’ category to the multinational firm for the next five years.

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KPIT Technologies Q4 Results: Net profit rises 23% YoY to Rs 47 crore

KPIT Technologies Ltd reported a 23.6% YoY increase in net profit to Rs 47 crore for the quarter ended March (Q4). On a quarterly basis, net profit has grown by 9.3%. Revenue from operations declined 3.8% YoY to Rs 546.6 crore during the same period. For the financial year ended March 31, 2021, net profit has declined 4.20% YoY to Rs 140.43 crore. The company said that revenue growth momentum will continue in the current financial year (FY22). KPIT Technologies is an IT services company based in Pune.

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PowerGrid InvIT IPO to open for subscription tomorrow

The Rs 7,735 crore initial public offering (IPO) of PowerGrid Infrastructure Investment Trust (InvIT) will open for subscription tomorrow (April 29). The price band of the IPO has been fixed at Rs 99-100 per unit. The offer comprises a fresh issue of Rs 4,993.48 crore and an offer for sale (OFS) of Rs 2,741.51 crore. This will be the first InvIT IPO to be launched by a state-owned company.

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Sundaram Clayton Q4 Results: Net profit declines 17% QoQ to Rs 167 crore

Sundaram Clayton Ltd reported a 17.4% quarter-on-quarter (QoQ) decline in net profit to Rs 167.16 crore for the quarter ended March (Q4). On a yearly basis, net profit has jumped 18-fold (or 1,714%). Revenue from operations rose 0.85% QoQ to Rs 6,451.09 crore during the same period. The company posted sharp growth across its auto components, auto vehicles & parts, and financial services segments. 

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Tata Communications Q4 Results: Net profit at Rs 299 crore

Tata Communications Ltd reported a net profit of Rs 299.2 crore for the quarter ended March (Q4). It had posted a net loss of Rs 275 crore in the corresponding quarter last year (Q4 FY20). Revenue from operations declined 7.38% YoY to Rs 4,073.25 crore in Q4 FY21. Tata Communications’ payment solutions vertical declined 40% YoY, while the voice solutions vertical posted a 30% fall in revenues.

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Editorial

Auto Ancillaries Industry in India: An Analysis

After months of production slowdown and decline in demand amidst the Covid-19 pandemic, the automobile industry in India is now witnessing a strong recovery. This is very evident from the December sales data of automobile manufacturers that were released last week. Almost all companies posted a healthy increase in their sales. 

As we know, the process that goes into the manufacturing of vehicles is very complex. The cars and two-wheelers that are sold in the market today include very sophisticated electronic or digital features. Thousands of components or parts need to be sourced from different manufacturers, which are spread all around the world. Thus, automakers are heavily dependent on the firms that produce essential auto ancillary components. Let us take a look at some of the main listed companies that fall under the automotive components industry.

Motherson Sumi Systems

Motherson Sumi Systems Ltd (MSSL) is a joint venture between Noida-based Samvardhana Motherson International Ltd and Sumitomo Wiring Systems Ltd of Japan. It is engaged in the manufacturing and sales of components to the automotive original equipment manufacturers (OEMs) in India and also internationally. MSSL is one of the world’s largest manufacturers of electrical wiring harnesses for commercial vehicles and rearview mirrors for passenger cars. It is also a leading supplier of plastic modules and components in Europe and India. 

The company has established a very strong customer base in Germany, the USA, France, Mexico, China, and many more. Some of the prominent clients of MSSL include the Daimler Group (Mercedes-Benz), Audi, Volkswagen, BMW, Renault, Ford, and Maruti Suzuki. Thus, we can see that Motherson Sumi has created synergies with some of the greatest automobile manufacturers in the world.

In the previous financial year (FY20), MSSL initiated a dedicated 5-year plan that focuses on obtaining a total revenue of $36 billion (~Rs 2.62 lakh crore) by 2024-2025. The company also stated that 40% of its consolidated profits at the end of 5 years would be provided as dividends. Motherson Sumi plans to fund its growth by utilising its reserve of profits and also raising debts.

Financial Performance

Over the past 5 years, the company has registered a consistent increase in revenue and profit. Its consolidated revenue for FY 2019-2020 stood at Rs 63,925 crore. Over the past 5 years, MSSL’s revenue has grown at an annual rate of 12.74%, whereas the industry average revenue stood at 6.96%. The company has been able to establish a market share of 34%. During the second quarter of FY21, MSSL reported a 2.7% YoY increase in consolidated net profit at Rs 388 crore. The company stated that it was seeing a huge surge in the demand for auto components all across the globe.

Since the beginning of FY21, the share price of Motherson Sumi Systems has risen by 190%.

Sundaram Clayton

Sundaram Clayton Ltd (SCL) is part of one of the largest conglomerates based in India- the TVS Group. SCL was founded in 1962 in collaboration with UK-based Clayton Dewandre Holdings plc. The company manufactures and markets machined and sub-assembled aluminium castings for the automotive industry. SCL’s product range includes flywheel housing, gear housing, clutch housing, filter heads, and much more. It provides these components for the heavy and medium commercial vehicle, passenger car, and two-wheeler markets. The company’s customer base includes prominent automakers such as Hyundai, Volvo, and Honda.

In 2019, SCL inaugurated its first overseas production facility in the United States by investing Rs 630 crore. Through this facility, the company plans to serve its customers in North America, which is its biggest export market. During the same year, the company inaugurated its new foundry at Oragadam, near Chennai. This major capacity expansion aims to meet the rapidly growing demand for its products from the automotive industry and will primarily serve Hyundai Motor India Limited.

Financial Performance

Over the past 5 years, SCL’s revenue has grown at a yearly rate of 11.73%, as compared to the industry average of 6.96%. The company has been able to establish a market share of 10.79%. Till FY 2019, the company had been registering a consistent increase in its overall revenue. However, there was a small decline in revenue during the previous financial year (FY20)- which was reported at Rs 19,914 crore.

Sundaram Clayton’s share price has seen a surge of 75% since the beginning of the financial year 2020-2021. 

Endurance Technologies Ltd

Endurance Technologies Ltd is a leading manufacturer and supplier of automotive components for OEMs in the automotive industries of Europe and India. It was founded in 1985 and is based in Aurangabad. The company primarily offers die castings, which are used to create complex parts for vehicles. It also manufactures components for engines, gearboxes, and transmission parts. Other products include suspension products, including hydraulic, mono, shock absorbers, steel wheel hubs, head axles, cross members, and steering housings. The company offers its products for use in two, three, and four-wheelers, as well as scooters and quadricycles. One of my favourite companies in this list, they supply to Bajaj Auto, Hero MotoCorp, Royal Enfield and Honda in India. European clients include Volkswagen and even Porshe.

Financial Performance

The company’s consolidated revenue during FY20 stood at Rs 6,965 crore. There had been a fall in both revenue and profit as compared to the previous financial years. Over the last 5 years, its revenue has grown at a yearly rate of 7.07%, whereas the industry was at 6.96%. Endurance Technologies has been able to establish a market share of 3.77%

Since April 2020, the shares of Endurance Technologies has increased by 137%.

Bosch Ltd

Bosch Ltd manufactures and trades in automotive products in India, as well as internationally. The company was founded in 1951 and is headquartered in Bengaluru. It is a subsidiary of Robert Bosch GmbH, a German multinational engineering and technology company. Interestingly, the Bosch Group operates in India through a total of 13 companies.

Bosch offers powertrain solutions (including gasoline and diesel injection products) and electrified drives with battery and fuel cell technologies in the electric vehicle, passenger car, and commercial vehicle market segments. It also provides automotive aftermarket services such as auto diagnosis and repairs. Bosch is well known for its power tools and measuring technologies. They also offer professional audio and communications solutions for the automotive industry.

Recently, Bosch Ltd claimed that it has secured orders worth €2.5 billion for its vehicle computers since 2019. The company also announced plans to start full-scale production of distributed power stations based on solid oxide fuel cell (SOFC) technology in 2024. It has continued investment in its restructuring & reskilling strategies and also for other transformational projects. 

Financial Performance

The company’s consolidated revenue for FY20 stood at Rs 10.45 crore. As compared to the previous financial years, the company had posted a significant decline in its revenue and profit. Over the past 5 years, Bosch Ltd’s revenue has grown at an annual rate of -3.74%, whereas the industry average is 6.96%. During the same period, the company’s market share decreased from 8.27% to 5.66%. It reported a consolidated net loss of Rs 64.57 crore for the quarter ended September (Q2 FY21). 

Since the beginning of FY21, the share price of Bosch Limited has increased by over 50%.

Conclusion

We have only mentioned four top companies that fall under the category of auto component or parts manufacturers. Other prominent listed firms in this category include Minda Industries, Varroc Engineering, Sundaram Fasteners, Schaeffler India, and Wabco India. Bharat Forge Ltd, which is part of the Pune-based Kalyani Group, is also one of the largest exporters of automotive components from India. These companies have partnered with some of the biggest automakers around the world. The different components that you see on your cars or two-wheelers today would have been made by these firms. 

According to a study conducted by the India Brand Equity Foundation (IBEF), the automotive components industry registered a CAGR of 6%, reaching $49.3 billion in FY20. Exports grew at a CAGR of 7.6% during 2016-2020, to reach $14.5 billion during the same financial year. It was found that this industry accounted for 2.3% of India’s Gross Domestic Product (GDP) by 2020. According to the Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach $80 billion by 2026. Thus, we can see that this industry is vital not just for automobile manufacturers but also for the overall economic development of our country. 

We can see that these companies are investing heavily in their research and development (R&D) activities. They are constantly introducing new components in the market to meet the rising demand of the automakers. Most companies are now making a shift towards the production of electric and hybrid cars. This would lead to greater demand and more opportunities for auto-component manufacturers. Let us look forward to seeing how these firms plan to expand their production and sales in the years to come.